ReddiFund protects cashflow in the event of redundancy payouts


Being faced with redundancy payment obligations can have a significant cashflow impact for companies within WA’s building and construction industry and this can often occur during a financially challenging time.  

ReddiFund is about giving employers important cashflow protection by allowing them to contribute regular payments that can then be released to workers in the event of circumstances leading to redundancy. 

Previously known as the WA Construction Industry Redundancy Fund, ReddiFund is backed jointly by major building and construction associations and unions.  It not only ensures that workers receive their redundancy payments but lifts the administration burden from companies in managing these requirements themselves, as long as the employer has made their contributions to the fund to meet award obligations. 

ReddiFund Chief Executive Officer Kieron Gubbins advises that a lack of understanding of redundancy award obligations can catch out employers in the industry and leave them unprepared – for example when employees cease their employment and companies are required to come up with the funds to pay out their redundancy entitlements. 

“While it is not mandatory for employers to contribute to ReddiFund, the service we offer, at no additional cost to the employer, can relieve the stress for both employers and their workers when these unfortunate situations occur,” Kieron said.

Redundancy obligations apply to most employers in the industry large or small, and can extend to workers who leave an employer after 12 months, with the only exception being dismissal for inappropriate behavior. 

Through ReddiFund, employers contribute as a provision for these events to ensure that their workers automatically qualify for payments.”

The Plumbing and Fire Sprinklers Award 2010 (MA000036) (‘the modern award’) provides an industry specific redundancy scheme, the entitlements of which differ significantly from the Fair Work Act 2009.  Under the modern award if an employer occasions the redundancy in the first 12 months of the employee’s employment then the employee is entitled to pro-rata redundancy on termination (calculated at 1.75 hours per week of service).

After a year of continuous service employees are entitled to a minimum of two and a half weeks’ redundancy or severance pay. This increases exponentially right up to eight weeks pay for more than four years of service.  

In addition to providing for these payment obligations, Mr Gubbins said that many building and construction employers don’t realise the tax benefits that are also available by contributing into ReddiFund. 

“Trusting ReddiFund with the management of monthly redundancy allowance payments means tax deductibility, reduction of liabilities and less administration for employers,” he said.  

ReddiFund has been managing redundancy entitlements on behalf of WA-based building and construction industry employers for 30 years this year with more than $191 million paid out on over 101,000 redundancy claims.

Mr Gubbins said there are approximately 65,000 active on-site building and construction workers in Western Australia but a low proportion are currently protected by ReddiFund.

If you need help understanding your redundancy obligations please contact Reddifund on (08) 9481 0259.

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